Digital Health Opportunities

Amit Varma, Managing Partner, Quadria Capital, India

The article focuses on how digital health is helping manage chronic conditions through the use of technology and the solutions that are being developed keeping in mind the aging population globally.

The healthcare ecosystem is witnessing a paradigm shift in the way the services are being delivered and consumed. This is driven by the pressing need to have an inclusive, high quality, cost-effective and decentralised model of healthcare delivery. While these needs lead to creating ambitious targets for our society and government, the enterprising side of the society is busy creating options and models to help move in the right direction. One such option is the digital health model. Digital health will significantly improve the continuum of care, providing solutions that aide people from birth to end of life, from well to sick.

With rising incomes, lifestyle changes and changing consumer behaviour towards wellness, the healthcare industry is transitioning to a consumer-driven industry from a provider-driven industry. Additionally, with increasing healthcare costs and an inadequate healthcare infrastructure, efforts are being made to shift healthcare to consumption-based set up. Healthcare is moving towards an anticipatory combination of “Predict and Prevent Model” that addresses the root causes of health afflictions and focuses on staving off future issues by advocating major lifestyle changes, behavioural changes, or preventative practices. These changes are driven by the underlying need to provide empowerment, convenience and enhanced experience to the patients and the proliferation is fueled by technology and entrepreneurship.

In emerging markets the new digital health model will play a pivotal role in overcoming many of the challenges impeding healthcare delivery, including improving healthcare access, affordability, quality and safety. Numerous developing countries are hampered in their efforts to deliver healthcare services, especially in rural areas, by an acute lack of resources and infrastructure. Sixty-two per cent of Africa’s entire population resides in rural areas, where there is poor access to medical facilities. A persistent power crisis in South Africa is making it difficult for hospitals to maintain continuous services, especially in their critical care units. India, with an average 0.7 hospital beds per 1,000 of its population, has a patchy public healthcare system with underfunded hospitals and clinics, and ineffective health-related schemes. India’s limited healthcare resources are heavily skewed towards urban areas (65-70 per cent of infrastructure and manpower), while ~70 per cent of the population resides in rural areas. There is continued need for improved healthcare infrastructure in China’s tier II and III cities, even though the government has spent a huge amount of money on increasing healthcare infrastructure. Such infrastructure still needs trained doctors, clinicians who know how to run diagnostics, and other medical capabilities to run and utilise the infrastructure. Digitisation of health services, if done in a different model, can help to improve the quality of and access to care while reducing costs. Most developed countries have moved away from paper-based healthcare solutions and have adopted or are in the process of adopting ‘traditional’ digital healthcare models.

Globally, healthcare IT market is estimated at US$ 120 billion and is poised to reach US$ 220 billion by 2020 at a CAGR of 13 per cent. Digital innovations are helping to facilitate new diagnostic and treatment options, increase process efficiency and reduce costs. Technology advancements are also connecting developed and emerging markets — and participants along the entire healthcare value chain. This is also demonstrated from the fact that over the past year, digital health companies in USA alone, raised about US$4.5 billion in funding. Further, the segment witnessed 302 financing deals, with an average size of US$14.8 million.

However, as the convergence of healthcare and technology continues, the regulatory frameworks are still under evolution and hence companies are increasingly finding themselves lost in a thicket of unique legal issues, enforced by unfamiliar regulators, including privacy of patient information, consumer protection, fraud and patient safety.

Key Trends Evolving In the Digital Healthcare Space

The innovations in the health technology havegrown leaps and bounds in the recent times. Numerous devices and technologies have emerged in the digital space, which are accelerating the pace of growth in consumer and institutional healthcare delivery. Some prominent ones are

1. Wearable Technology: Wearable technology is playing a prominent role in today’s healthcare transformation. Wearables are closely intertwined with an evolving healthcare delivery model of bringing care closer to patient rather than patient having to go to a hospital. Wearable pedometers and heart monitors have been around for years, letting people keep track of how far they walk on a daily, weekly, or even monthly basis, further letting them track the amount of calories they’re burning when they exercise. However, with the advent of technology, these are expected to revolutionise healthcare. The overall market for wearable technology is expected to reach over US$30 Billion by 2020, at a CAGR of 17.8per cent between 2015 and 2020.The newly released gadgets, such as fitness bands and smart watches, have given wearers the ability to track an array of different types of health stats, generating huge amounts of data that can potentially be used in conjunction with medical records, doctors, and hospitals to provide a better, more personalised level of service. Better still, we’ve seen the recent emergence of a slew of health-related apps — programmes that act as personal trainers, help track and analyse basic health and exercise data, provide nutritional and dietary instruction while counting the calories oneconsumes, offer a litany of brainteasers and games that improve cognitive and linguistic faculty, regulate sleep cycle and help meditate, and encourage productivity through incentives and gentle reminders.

2. Telemedicine: Telemedicine is another platform, which, if harnessed optimally, can help both accessibility and affordability. It is a big tool to bridge the rural-urban divide by extending low-cost consultation and diagnosis facilities to the remotest areas via high-speed Internet and telecommunication. The global telemedicine market was valued at over US$17 billion in 2015, and it is expected to grow at a CAGR of 18.7per cent during 2016 - 2020. The global telemedicine market is growing at a significant rate, due to growing geriatric population, increasing healthcare cost, increasing government funding and grants for telemedicine, and increasing prevalence of chronic and lifestyle associated diseases. Several major hospitals in emerging markets are adopting telemedicine services and entering into public-private partnerships (PPPs) with respective governments. The new models like critical care management, home-based vital parameters mapping and PERS have created additional volumes for telemedicine services. These will be an additional enablers, transforming current practices in chronic disease care from ongoing or continual acute care episodes to a more proactive approach that empowers a patient to return to their benchmark threshold of health through appropriate device monitoring, behaviour modification and interaction with care providers – all remotely. As many chronic illnesses require daily monitoring, using remote monitoring technology, patients are able to closely monitor vitals, such as blood pressure, glucose levels, and weight and then relay the information to the right people at the right time –- all from the comfort of their own home.

3. Biosensor: While the benefits of remote and patient-empowered monitoring are now proven, making things smaller, convenient and non-invasive is where drug manufacturers, technology leaders and start-ups are placing much of their focus and resources. Biosensor miniaturisation has become a market of its own, whichis fast-growing and attracting investment. With this, however, come new industry challenges. From managing data privacy to overcoming adoption and implementation barriers, there are multiple constraints to be addressed.

4. Aditive Manufacturing - Often referred to as ‘3D printing,’ additive manufacturing’s prospective benefits are numerous as it can spur additional innovation, improve patient access to life-saving devices, simplify and accelerate the supply chain and production process and achieve considerable savings. As of 2014 the global 3D printing healthcare market recorded revenues of US$487 million and is expected to grow by 18.3 per cent annually until the year 2020.Medical technologies often are expensive when they enter the market, becoming cheaper over time, but many of the new 3D-printed solutions are coming in at a reasonable price point. This shift has the potential to disrupt the alarming trajectory of rising health care costs at exactly the moment when ageing Baby Boomers will be putting more pressure on the healthcare system.

5. Electronic Health Records: The global EHR market was valued at over US$18 billion in 2014 and is expected to grow at approximately CAGR of 5.5 per cent from 2015 to 2023, to reach an estimated value of US$25 billion by 2020. One trend impelling growth in EHR market is the increased adoption of predictive analytics. Healthcare organisations generate massive amount of clinical data such as patient health data and non-clinical data such as administrative and financial data.

IBM estimates that we are now creating 2.5 billion gigabytes of data every day, with >90 per cent of the data which currently exists having been created in the last two years alone. The ever increasing volume, variety, and velocity of clinical and non-clinical data have compelled healthcare organisations to implement statistical tools, data science, and mining technology. Such volumes can only be managed by technology, with the ability to cross reference individual with population level data, or to learn from everyday interactions between patients and physicians, key to some of the most innovative digital healthcare models.

The desirability of an EHR that can be easily accessed by a patient and by the physicians treating them across GP surgeries and secondary facilities has been clear for a generation, yet very few countries worldwide have a functioning national system. Privacy concerns have been a key barrier, as has the sheer scale of the logistical challenge in connecting up the disparate elements of healthcare systems. But over the next few years most European countries will seek to implement national EHR systems. In the US, a subcategory of digital healthcare companies providing an EHR system has emerged, with individual organisations and practices choosing from a range of providers, although limited interoperability of these systems makes a national or regional EHR a challenge. The EHR is not only a great way of empowering the patient and facilitating choice, which is essential for the success of digital healthcare, but also opens up the possibility of integrating an individual’s medical history into a digital consultation or treatment plan.

The above factors will help the digital world to evolve at a rapid pace and propel the importance of digital health amongst various stakeholders such as companies, governments and communities. This will consequently transform healthcare and the organisations that contribute to patient experience.